A recent report by cryptocurrency trading simulator Crypto Parrot has revealed that the market capitalization of Bitcoin, one of the first and most recognized digital currencies is closing in on a significant milestone of equating to almost 10 percent of the global banking sector.
At 9.2 percent, Bitcoin’s current market capitalization stands at $0.68 trillion as of January 19, 2021, while the global banking sector market cap stood at $7.40 trillion. Accounting for almost 10 percent of the cumulative global banking sector market capitalization is a significant milestone for the asset as it pushes for mainstream adoption.
Positive Q3 2020 for Banks and Bitcoin
Even though the banking sector saw a drastic decrease in market capitalization during the first two quarters of 2020, both Bitcoin and global banks have witnessed a tremendous surge in market capitalization from Q3 2020.
Successful administration of the COVID-19 vaccine and expected stability in the US political scene has also worked as a catalyst for the growth of banking sector market capitalization.
Meanwhile, Bitcoin largely remained resilient throughout the last year amid the coronavirus pandemic. The value of Bitcoin surged more than 500 percent from March 2020 with hitting an all-time high value of over $41,000 on January 8, 2021.
Investor’s desire to seek an alternative asset that is decentralized and not tied to any central bank has considerably influenced the higher than before valuation of Bitcoins. The weakened U.S. dollar has also given an unfair advantage to Bitcoin, making it the go-to destination for new and established investors.
Banks reign supreme
Despite the recent attention to Bitcoin, the cryptocurrency still has a long way to be even though both are considered as similar assets to stock since the holder can also benefit from rising usage driven by rising demand.
Even though the Bitcoin market capitalization will likely eat into the bank’s value, these financial institutions are still expected to be the most prominently used modes of transactions.